At the opening of an Ontario Securities Commission (OSC)hearing, prosecutor Hugh Craig said he would show the executives allowed weak internal controls, back-dated documents, and secretly controlled companies to which Sino-Forest bought and sold assets.

“Taken individually, each of these building blocks could constitute fraud. Taken together, they resulted in highly misleading disclosure and overstated assets and revenue,” he told a three-member OSC panel.

The allegations against former CEO Allen Chan and other executives Albert Ip, Alfred Hung, George Ho and Simon Yeung have not been proven.

Markus Koehnen, a lawyer for all the executives except former CEO Chan, said his clients denied the charges. He said that massive growth and the challenges of doing business in China had led to “operational mistakes” but did not equal fraud.

Chan’s lawyer Emily Cole said he also denies the charges.

The hearing is expected to take at least six months.

But any penalties may be limited in scope. The panel can at most levy fines and block the executives from Canadian markets. The defendants are based in Hong Kong and China.

The OSC both investigates and hears cases of suspected violations of securities law. It can also take cases to the Ontario Court of Justice in order to seek harsher penalties.

Sino-Forest had been listed on the Toronto Stock Exchange and at one point had a market capitalization of more than C$6 billion. But its shares tanked and were later de-listed after a short-seller in 2011 alleged the company had exaggerated its assets.

Craig said he plans to call witnesses from Ernst & Young, which had been Sino-Forest’s auditors, former Sino-Forest chief financial officer David Horsley, who settled with the OSC in July, former employees and others.